Shortage in Supply of ‘Carbon Black’ Causes Crisis in Rubber Industry

An acute shortage of the Carbon Black – a major raw material needed for manufacture of rubber products has caused the crisis in Indian Non-tyre Rubber industry. The shortage has caused the shutting down of a large number of small and medium sized manufacturing units across the nation.

AIRIA Committee Members addressing media at Press Conference

All India Rubber Industries Association (AIRIA), an industry body of non-tyre rubber products manufacturers, has appealed to the Govt. of India to act in the interest of the small and MSME sector, as the current crisis caused due to the shortage, and spiralling prices of Carbon Black in India, is crippling the rubber industry.

According to Vikram Makar – Sr. Vice-President, AIRIA,“Import of Carbon Black from China, Russia and other surplus countries, is restricted due to anti-dumping duties.Due to this, sudden shortage, Small & Medium Enterprises are denied availability and have to approach the unauthorised markets to buy Carbon Black at very high premiums, leading to immense losses to their businesses.”

Vikram Makar further stated, “The impact of raw material (Carbon Black) shortage is so severe over the past few months that about 1000 plus affected small units are on the verge of closure leading to the loss of nearly 2 lakh jobs, while entire industry is losing about Rs. 750 crore every month.”

As a pro-active step AIRIA recently had a meeting with the major manufacturers of Carbon Black in India to express its concern and seek the solution. However, manufacturers of Carbon Black expressed their inability to meet the supply gap as they were committed to their existing customers, largely in the Tyre Sector, in India, and to the exports. They further confirmed that their plants are running on full capacity, with no further scope of increase in supply of Carbon Black.

To tide over this crisis AIRIA is seeking Central Government to step in and has suggested to makea few policy amendments immediately to prevent the small and medium sized units from closing down. The association seeking a few amendments in the policyare :-

Permit to import the material without duty. This would ease the shortage and improve availability at fair price, so that the SMEs in the rubber industry can also meet their own delivery schedules in local and export markets, and save their units from closure.

(AIRIA is willing to be the nodal agency to see that implementation is fair to all)

GOI should Restrict/Stop exports of Carbon Black, for the supply position to ease.

GOI should immediately review the anti-dumping duty on Carbon Black as it is open to review considering current local supply considerations as well as the global situation. This has similarly been done in the past, in the case of other materials.

GOI should push for a cost audit of the companies producing Carbon Black in India to find whether the prices currently charged are exorbitant, with a need to keep a check on Carbon Black prices, in view of the current shortage, and need of the small industries.